865 F.

2d 566
1988-2 Trade Cases 68,379

BONJORNO, Joseph A., Kerr, George M., and Clisby, Barbara

K., as Transferees in Liquidation and Dissolution
of Columbia Metal Culvert Co., Inc.,
Appellants No. 88-1318,
v.
KAISER ALUMINUM & CHEMICAL CORPORATION and
Kaiser Aluminum &
Chemical Sales, Inc.
BONJORNO, Joseph A., Kerr, George M., and Clisby, Barbara
K., as Transferees in Liquidation and Dissolution
of Columbia Metal Culvert Co., Inc.
v.
KAISER ALUMINUM & CHEMICAL CORPORATION and
Kaiser Aluminum &
Chemical Sales, Inc., Appellants No. 88-1396.
Nos. 88-1318, 88-1396.

United States Court of Appeals,

Third Circuit.
Argued Oct. 21, 1988.
Decided Jan. 9, 1989.
Rehearing and Rehearing In Banc Denied Feb. 13, 1989.

Henry T. Reath (argued), Michael M. Baylson, Edward G. Biester, III,

Duane, Morris & Heckscher, Philadelphia, Pa., for appellants-cross
appellees.
Richard P. McElroy (argued), Ann B. Laupheimer, Leslie N. Brockman,
Blank, Rome, Comisky & McCauley, Philadelphia, Pa., for appelleescross appellants.
Before STAPLETON, SCIRICA and COWEN, Circuit Judges.

OPINION OF THE COURT

COWEN, Circuit Judge.

This appeal arises from an order of the district court granting plaintiff's motion
for post-judgment interest. Upon review, we conclude that the district court
erred with respect to some aspects of its application of the relevant statute. We
will affirm the district court's determination of the date from which interest
runs. We will reverse the district court's grant of post-judgment interest in the
amount of $2,632,886.30 because it incorrectly determined that the applicable
rate under the post-judgment interest statute is Pennsylvania's six-percent
simple interest rate, rather than the higher T-bill rate imposed by 28 U.S.C. Sec.
1961 (1982).

I.
2

This appeal involves a determination of (1) the applicable rate of post-judgment

interest, and (2) the date from which post-judgment interest should run. 1
Plaintiffs Joseph A. Bonjorno, George M. Kerr, Jr. and Barbara K. Clisby
("Bonjorno"), trustees in liquidation and dissolution of Columbia Metal Culvert
Co., Inc. ("Columbia"), filed a motion for award of post-judgment interest
under 28 U.S.C. Sec. 1961 against defendants Kaiser Aluminum Chemical
Corp. and Kaiser Aluminum Chemical Sales, Inc. ("Kaiser").2 The merits of the
underlying case are not relevant for purposes of this appeal.3 However, a
statement of the procedural history of the case is necessary in order to resolve
the issues presented.

The complaint in this case was filed in January, 1974. At the first trial, the
United States District Court for the Eastern District of Pennsylvania directed a
verdict for Kaiser at the conclusion of Bonjorno's evidence. The Court of
Appeals for the Third Circuit reversed, holding that there was sufficient
evidence to go to the jury. Columbia Metal Culvert Co. v. Kaiser Aluminum &
Chem. Corp., 579 F.2d 20, 37 (3d Cir.1978).

A second trial held in 1979 resulted in a jury verdict for Bonjorno. On August
21, 1979, the jury awarded Bonjorno damages in the trebled amount of
$5,445,000.00 and the judgment was entered on August 22, 1979. Kaiser then
filed motions for a new trial and judgment NOV.

On June 17, 1981, the district court denied Kaiser's motions as to the jury's
prior liability verdict, but concluded that the evidence did not support the jury's

damage award and granted Kaiser's motion for a new trial as to damages only.
Bonjorno v. Kaiser Aluminum & Chem. Corp., 518 F.Supp. 102, 109, 119
(E.D.Pa.1981). Additionally, the district court granted Kaiser's motion for
judgment NOV as to a portion of the damages previously awarded by the jury
in 1979. Id. at 114.
6

The limited retrial on damages was conducted in 1981 and resulted in a

December 2, 1981 jury award for Bonjorno for damages in the trebled amount
of $9,567,939.00. The judgment was entered on December 4, 1981. Once
again, Kaiser filed motions for a new trial and judgment NOV. On January 17,
1983, the district court granted Kaiser's motion for judgment NOV as to a
portion of the damages awarded by the jury, thereby reducing the judgment to
$4,651,560.00 after trebling. Bonjorno v. Kaiser Aluminum & Chem. Corp.,
559 F.Supp. 922 (E.D.Pa.1983). This judgment was entered on January 18,
1983.

Bonjorno then appealed the reduction of the damage award, and Kaiser crossappealed the failure of the district court to grant a new trial or to grant in full its
motion for judgment NOV. On December 27, 1984, the Court of Appeals
reversed the district court's partial grant of Kaiser's motion for judgment NOV
as to damages, vacated the judgment entered on January 18, 1983, and
reinstated and affirmed the entire $9,567,939.00 judgment entered on the jury's
verdict of December 2, 1981. Bonjorno v. Kaiser Aluminum & Chem. Corp.,
752 F.2d 802, 815 (3d Cir.1984). Kaiser's petition for rehearing in banc was
denied, as was its subsequent petition for certiorari. Kaiser Aluminum & Chem.
Corp. v. Bonjorno, 477 U.S. 908, 106 S.Ct. 3284, 91 L.Ed.2d 572 (1986).

Because the Court of Appeals' December 27, 1984 opinion was silent as to the
allowance of post-judgment interest, Bonjorno petitioned this Court on June 24,
1985 for instructions to be included in the mandate pursuant to Fed.R.App.P. 37
regarding interest.4 4] Before this petition was acted upon by this Court,
counsel for both parties entered into a stipulation providing that the district
court first address all issues of interest allowable under 28 U.S.C. Sec. 1961 and
Fed.R.App.P. 37. This Court approved that stipulation on July 1, 1986 and
certified the judgment in lieu of a formal mandate.

On July 1, 1986, the mandate of this Court, which had been stayed pending
disposition of Kaiser's petition for a writ of certiorari, was issued to the district
court. On July 3, 1986, Kaiser paid $9,567,939.00 to Bonjorno. This Court's
certified judgment did not instruct the district court on the issues of postjudgment interest.

10

After full briefing, the district court heard oral argument on the post-judgment
interest issues on December 23, 1986. On April 11, 1988, it issued its
Memorandum and Order awarding $2,632,886.30 in post-judgment interest to
Bonjorno. App. at 770. The district court held that interest ran from December
2, 1981, the date of the damage verdict on which the correct judgment would
have been entered but for the district court's partial grant of judgment NOV.

11

The district court next addressed the question of whether the amendments to 28
U.S.C. Sec. 1961 apply to money judgments entered prior to October 1, 1982,
the effective date of the amendments. Specifically, having determined that the
interest should run from December 2, 1981, the district court was faced with
the question of whether the higher interest rate imposed by the amended
version of 28 U.S.C. Sec. 1961 should apply from December 2, 1981--ten
months before the effective date of the amendments. Interpreting Bradley v.
School Board of the City of Richmond, 416 U.S. 696, 94 S.Ct. 2006, 40
L.Ed.2d 476 (1974), the district court refused to apply the amended statute
"retroactively" and, instead, applied the version of the statute which was in
effect on the December 2, 1981 jury verdict date. App. at 784.

12

The federal statute governing awards of post-judgment interest in effect from

the time Columbia filed its complaint on December 23, 1974 through
December 2, 1981 provided:

13
Interest
shall be allowed on any money judgment in a civil case recovered in a
district court. Execution therefor may be levied by the marshal, in any case where,
by the law of the State in which such court is held, execution may be levied for
interest on judgments recovered in the courts of the State. Such interest shall be
calculated from the date of the entry of judgment at the rate allowed by State law.
14

28 U.S.C. Sec. 1961 (1976) (amended 1982).

15

On April 2, 1982, Congress passed the Federal Courts Improvement Act of

1982 ("FCIA"), Pub.L. No. 97-164, 96 Stat. 25 (1982) which amended 28
U.S.C. Sec. 1961 (effective October 1, 1982). The amended statute states in
pertinent part:

16 Interest shall be allowed on any money judgment in a civil case recovered in a

(a)
district court. Execution therefor may be levied by the marshal, in any case where,
by the law of the State in which such court is held, execution may be levied for
interest on judgments recovered in the courts of the State. Such interest shall be
calculated from the date of the entry of the judgment, at a rate equal to the coupon
issue yield equivalent (as determined by the Secretary of the Treasury) of the

average accepted auction price for the last auction of fifty-two week United States
Treasury bills settled immediately prior to the date of the judgment. The Director of
the Administrative Office of the United States Courts shall distribute notice of that
rate and any changes in it to all federal judges.
17 Interest shall be computed daily to the date of payment except as provided in
(b)
section 2516(b) of this title and section 1304(b) of title 31, and shall be compounded
annually.
18

28 U.S.C. Sec. 1961 (1982).

19

Thus, the district court's decision applies the six-percent simple interest rate
required under Pennsylvania law, as opposed to the significantly higher "T-bill"
rate required by the amended version of 28 U.S.C. Sec. 1961.5

20

The district court also rejected Bonjorno's argument that interest continued to
run after Kaiser paid the $9,567,939.00 judgment on July 3, 1986. After a full
evidentiary hearing, the court on April 11, 1988 made a factual finding that the
parties intended the July 3, 1986 payment as a payment of the principal
amount. App. at 792. Bonjorno filed a notice of appeal from the April 11, 1988
Order and Kaiser filed its notice of cross-appeal on May 11, 1988.

II.
21

We note at the outset of our analysis that the availability of interest in an action
arising under a federal statute is governed by federal law, not the law of the
forum state. Poleto v. Consolidated Rail Corp., 826 F.2d 1270, 1274 (3d
Cir.1987). Because Bonjorno's underlying claims allege violations of the
federal antitrust laws, state substantive law is not implicated. Id.

22

We have jurisdiction over this appeal because the judgment of the district court
is "final" for purposes of 28 U.S.C. Sec. 1291 (1982). Determining whether the
FCIA applies to judgments entered prior to its effective date presents an issue of
law, over which we have plenary review. See, e.g., Campbell v. United States,
809 F.2d 563, 567 (9th Cir.1987). The district court's determination that the
July 3, 1986 payment was intended to go to principal presents a factual question
which we review subject to the clearly erroneous standard.

A.
THE DATE FROM WHICH INTEREST BEGINS TO RUN

23

We must first determine the date from which post-judgment interest runs. In
this case, the parties have suggested three dates as possible starting points for
the accrual of post judgment interest: (1) Kaiser argues that the district court
correctly began the accrual of interest on December 2, 1981, the date of the
initial jury verdict on damages which was vacated and then reinstated; (2)
alternatively, Kaiser argues that interest accrues from July 1, 1986, the date of
this Court's mandate; and (3) Bonjorno argues that interest should accrue from
August 16, 1979, the date the jury delivered its liability verdict.

24

First, we reject the third possibility. Bonjorno argues that interest should accrue
from the date of the original liability verdict--August, 1979--because liability
was ultimately affirmed. See Bonjorno, 752 F.2d 802. However, the August 16,
1979 verdict on liability alone was insufficient under Fed.R.Civ.P. 54(c) to
allow or require the court to enter judgment. Little if any authority supports the
position that post-judgment interest accrues from the date of an unliquidated
verdict or from a judgment vacated by a district court which is never reinstated,
modified or even appealed. The vast majority of cases which construe section
1961 to allow interest to run from a verdict rather than a "judgment" involve
verdicts which include an assessment of damages where judgment is later
entered on the verdict amount. See, e.g., Poleto v. Consolidated Rail Corp., 826
F.2d 1270 (3d Cir.1987); Turner v. Japan Lines, Ltd., 702 F.2d 752 (9th
Cir.1983); Givens v. Missouri-Kansas-Texas R.R. Co., 196 F.2d 905 (5th
Cir.1952). In Poleto, we stated that "the purpose of post-judgment interest is to
compensate the successful plaintiff for being deprived of compensation for the
loss from the time between the ascertainment of the damage and the payment
by the defendant." 826 F.2d at 1280 (emphasis added). This reasoning weighs
against permitting Bonjorno to recover interest from August 16, 1979 (the date
of the unliquidated liability verdict) or August 22, 1979 (the date of the first
damage verdict which was vacated and never reinstated, increased, reduced or
even appealed).6

25

We next choose between December 2, 1981 and July 1, 1986 as the proper date
to begin the accrual of interest. Kaiser argued in the district court that because
its liability for the $9,567,939.00 judgment did not become final until this Court
issued its mandate on July 1, 1986, interest should run from this date.

26

We note that a split among the courts of appeals for several of the circuits
exists with respect to the proper application of 28 U.S.C. Sec. 1961, i.e.,
whether the date of the original award is used if it is later vacated but then
reinstated or whether the date of the later award is used.7 However, the Third
Circuit Court of Appeals has previously addressed this issue.

27

We hold that the interest properly accrues from the December 2, 1981
judgment. See Institutionalized Juveniles, 758 F.2d 897, 927 n. 48 (stating that
"[w]e ... reject the rule articulated in Harris v. Chicago Great Western Ry., 197
F.2d 829, 835 (7th Cir.1952), which would allow interest only from the date of
the revised judgment [i.e., following the Court of Appeal's mandate].").8

28

In Institutionalized Juveniles, 758 F.2d at 927, this Court "adopt[ed] the rule set
out in" Perkins v. Standard Oil Co., 487 F.2d 672 (9th Cir.1973). In addressing
the amount of post-judgment interest available on a reduced attorney fee award,
the court in Perkins held that the reduction of the award was a partial
affirmance of the district court judgment and that interest would run from the
date the district court erroneously awarded the excessive fees. 487 F.2d at 676.
The court stated that "interest should run from the date of entry of the original
judgment because that is the date on which the correct judgment should have
been entered." Id.

29

Had there been no error by the district court in this case, a judgment for
damages would have been entered on December 4, 1981, based on the jury
verdict returned December 2, 1981. The district court then correctly revised its
decision to conform with Poleto, 826 F.2d at 1280, stating that interest is
calculated from the date of the damage verdict underlying the appropriate
judgment. Accordingly, the district court correctly awarded interest from
December 2, 1981.9

B.
THE APPLICABLE LAW AND RATE OF INTEREST
30

We next address the issue of which version of the FCIA is to govern the
calculation of post-judgment interest.10 When the December 2, 1981 jury
verdict in this case was rendered, 28 U.S.C. Sec. 1961 applied the relevant state
interest rate, which in this case was Pennsylvania's six percent simple interest
rate. See 28 U.S.C. Sec. 1961 (1976).11 Effective October 1, 1982, the statute
was amended to provide a uniform federal post-judgment interest rate equal to
the T-bill rate. See 28 U.S.C. Sec. 1961(a) (1982).

31

The various courts of appeals have disagreed over whether to apply the federal
method of determining interest to judgments entered before October 1, 1982.
See, e.g., Bailey v. Chattem, Inc., 838 F.2d 149, 156 (6th Cir.1988) (applying
the pre-amendment rate of interest up to the effective date of the amendments
and applying the post-amendment rate thereafter); Campbell v. United States,
809 F.2d 563, 569 (9th Cir.1987) (same); Litton Sys. v. American Tel. & Tel.

Co., 746 F.2d 168 (2d Cir.1984) (holding that the FCIA does not apply to a
June 1981 judgment against a private party for interest accruing either after the
judgment or after the effective date); R.W.T. v. Dalton, 712 F.2d 1225, 1234-35
(8th Cir.) (holding that the amended statute should apply to a pre-effective date
judgment for the entire post-judgment period), cert. denied, 464 U.S. 1009, 104
S.Ct. 527, 78 L.Ed.2d 710 (1983). Thus, three interpretations have been
presented and approved by the various courts of appeals: (1) the FCIA applies
to judgments entered after the effective date; (2) it applies to judgments entered
before the effective date for the entire post-judgment period; and (3) it applies
to judgments entered before the effective date but only for interest accruing in
the period after the effective date.12 See Campbell, 809 F.2d at 568.
32

We find that the issue is whether "to apply the law in effect at the time [a court]
renders its decision, unless doing so would result in manifest injustice or there
is statutory direction or legislative history to the contrary." Bradley v. School
Board, 416 U.S. 696, 711, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476 (1974).
Bradley, therefore, provides the starting point for our analysis.

33

The district court, relying on two cases in the Eastern District of Pennsylvania,
found that "courts in this Circuit have uniformly assumed the correctness of the
holding herein that the prior version of section 1961 applies to judgments
entered while it was in effect and amended section 1961 applies to judgments
entered on and after its effective date." App. at 789, citing United States ex rel.
Billows Elec. Supply Co. v. E.J.T. Construction Co., 557 F.Supp. 514
(E.D.Pa.1983) (holding that the FCIA does not apply to a July 1981 judgment
against a private party for interest accruing after the judgment), aff'd mem., 729
F.2d 1450 (3d Cir.1984) and Peterson v. Crown Fin. Corp., 553 F.Supp. 114
(E.D.Pa.1982) (same holding for a July 1979 judgment). While the United
States Court for the Eastern District of Pennsylvania has refused to apply the
post-amendment rate to judgments pre-dating the effective date of the
amendments, its decisions do not bind this Court. We note that neither of these
cases cite Bradley.13 Thus, we view this issue as an open question not yet
squarely addressed by this Court.

34

At a first glance, the Bradley presumption of applying the law in effect at the
time a court renders its decision in the absence of contrary legislative intent
seems inconsistent with the long-standing rule of statutory construction that
statutes are presumed to have only "prospective" effect and will be given
"retroactive" effect only if there is affirmative legislative direction to do so.
However, upon closer examination, the two principles are not in conflict here.14
While the term "retroactive" is commonly used to refer to statutes that operate
on pre-enactment transactions and pre-existing rights or obligations, a statute is

not "retroactive" simply because facts from the pre-enactment period are
implicated. The presumption against "retroactivity" has generally been applied
only when application of the new law would affect rights or obligations existing
prior to the change in law. See, e.g., United States v. Security Indus. Bank, 459
U.S. 70, 78, 103 S.Ct. 407, 412, 74 L.Ed.2d 235 (1982); Weaver v. Graham,
450 U.S. 24, 29-30, 101 S.Ct. 960, 964-965, 67 L.Ed.2d 17 (1981); Beazell v.
Ohio, 269 U.S. 167, 169-70, 46 S.Ct. 68, 68-69, 70 L.Ed. 216 (1925). We apply
the Bradley presumption in this case because to do so does not pose any
constitutional problems.
1. Legislative History
35

We turn next to the legislative history to determine whether Congress intended

that the FCIA not be applied to interest accruing after the effective date on
judgments entered prior to that date. We agree with the Courts of Appeals for
the Second and Ninth Circuits that this presumption may be displaced by "fair
indication that the statute, properly construed, has only prospective effect." See
Litton Systems, 746 F.2d at 174; Campbell, 809 F.2d at 572 (quoting Litton
Systems, 746 F.2d at 174). However, if the legislative history is unclear, the
Bradley presumption should control. See Bradley, 416 U.S. at 715-16, 94 S.Ct.
at 2018. 15

36

Unfortunately, the legislative history concerning the effect of the FCIA's postjudgment interest provision on unpaid judgments entered prior to the date of
enactment is sparse. In Campbell, the Court of Appeals for the Ninth Circuit
stated that it was "not persuaded that this scant indication in the statute and
legislative history constitutes a 'fair' indication that the FCIA should not be
interpreted to impose interest at the T-bill rate in the period following the
enactment date." 809 F.2d at 574 (emphasis in original). The "scant indication"
was that the effective date of the amendments was delayed for a period after
the date of the enactment of the amendments. The district court in this case
found persuasive the fact that Congress specifically postponed the effective
date of the amendments for six months from passage on April 2, 1982 until
October 1, 1982. App. at 787-88, citing Pub.L. No. 97-164, Sec. 402, 96 Stat.
57 (1982). The district court concluded on this basis that Congress did not
intend interest to accrue at the T-bill rate on judgments entered before October
1, 1982. We disagree. This ambiguous move to delay the effective date of the
amendment is insufficient to displace the Bradley presumption.

37

We are also guided by the principle of statutory construction that courts assume
that "our elected representatives, like other citizens, know the law." Cannon v.
University of Chicago, 441 U.S. 677, 696-97, 99 S.Ct. 1946, 1957-58, 60

L.Ed.2d 560 (1979). Consequently, we may assume that, when Congress

passed the amendment to section 1961, as well as the entire FCIA, it was aware
that courts would apply the amendment to cases pending on appeal under
Thorpe v. Housing Authority of Durham, 393 U.S. 268, 89 S.Ct. 518, 21
L.Ed.2d 474 (1969) and Bradley v. Board of Education, 416 U.S. 696, 94 S.Ct.
2006, 40 L.Ed.2d 476 (1974). In light of this, it seems unreasonable to conclude
that Congress intended its delay in the effective date of the provisions of the
entire Act to act as a directive to the judiciary to disregard Thorpe and Bradley
and to apply the amendment prospectively.
38

We are unpersuaded by the Litton court's reasoning that awarding interest

beginning on the effective date when the interest is keyed to some past date
(the date of judgment) "makes no economic sense at all" and that Congress
could not have intended such a result. Litton, 746 F.2d at 175. 16 The Court of
Appeals for the Second Circuit also stated in Litton that a party found liable
would receive an "unwarranted windfall" if interest rates subsequently declined.
Id. However, if the rates rise after entry of judgment, the prevailing party would
not be fully compensated for the loss of the use of its money. It appears that
Congress believed that the T-bill rate would strike an adequate balance between
the dangers of windfall and undercompensation. Further, we believe that
Congress sought to establish a scheme which would be easy to administer--a
goal which is undermined if more than one interest rate applies. Therefore, we
find that a proper construction of the FCIA does not require that the Bradley
presumption be set aside.

39

Finally, this Court has cited with approval R.W.T. v. Dalton, 712 F.2d 1225
(8th Cir.), cert. denied, 464 U.S. 1009, 104 S.Ct. 527, 78 L.Ed.2d 710 (1983),
which holds that the T-bill rate applies even with respect to judgments entered
prior to the effective date of the amendments. See Institutionalized Juveniles,
758 F.2d at 927 n. 49. We find the rule adopted by the Court of Appeals for the
Eighth Circuit to be the better rule, even though it is a minority position among
the circuit courts. The purpose of interest on the judgment is to preserve the
value of the judgment against the diminishing effects of the time value of
money, and the Dalton rule comes closest to achieving this objective.172.
"Manifest Injustice "

40

While we find that the legislative history of the FCIA does not displace the
Bradley presumption, the presumption may, nevertheless, be overcome if the
Bradley exceptions for manifest injustice apply. Bradley requires that interest
accrue prospectively in this case if such a construction would not result in
"manifest injustice." 416 U.S. at 716-17, 94 S.Ct. at 2018-19. Bradley
enunciates the following three-part test pertaining to finding "manifest

injustice":
41 concerns expressed by the Court in [U.S. v.] Schooner Peggy [5 U.S. (1 Cranch)
The
103, 2 L.Ed. 49 (1801) ] and in Thorpe relative to the possible working of an
injustice center upon (a) the nature and identity of the parties, (b) the nature of their
rights, and (c) the nature of the impact of the change in law upon these rights.
42

416 U.S. at 717, 94 S.Ct. at 2019.

43

With respect to the first Bradley factor, the Supreme Court in United States v.
The Schooner Peggy, 5 U.S. (1 Cranch) 103, 110, 2 L.Ed. 49 (1801), stated
that, "in mere private cases between individuals, a court will and ought to
struggle hard against a construction which will, by a retrospective operation,
affect the rights of parties, but in great national concerns, where individual
rights ... are sacrificed for national purposes, ... the court must decide according
to existing laws." The plaintiffs in the present case are acting as private
attorneys general in enforcing federal policy embodied in the antitrust laws.
See, e.g., Mitsubishi Motors v. Soler Chrysler-Plymouth, 473 U.S. 614, 634-35,
105 S.Ct. 3346, 3358-59, 87 L.Ed.2d 444 (1985) (stating that "[a] claim under
the antitrust laws is not merely a private matter.") (citations omitted). We
believe that an action to increase the rate at which post judgment interest
accrued on a judgment awarded to a private antitrust plaintiff also implicates
national interests. But see Litton, 746 F.2d at 175.18 When antitrust plaintiffs
serve the national interest by acting as private attorneys general in enforcing the
antitrust laws, the congressional mandate that plaintiffs who prevail in such a
suit be awarded treble damages should not be diminished by insufficient
postjudgment interest. Therefore, this factor weighs heavily against finding
manifest injustice.

44

The second factor concerns the nature and identity of the parties. InBradley, the
Supreme Court stated that it "has refused to apply an intervening change to a
pending action where it has concluded that to do so would infringe upon or
deprive a person of a right that had matured or become unconditional." 416 U.S.
at 720, 94 S.Ct. at 2020. Bonjorno's right to receive interest did not mature or
become unconditional until a final controlling judgment was entered on the
merits. This did not occur until after the effective date of the amendments.

45

The third Bradley factor pertains to the nature of the impact of the change in
law upon these rights. The Bradley Court suggested that to find manifest
injustice, the Court must find that "new and unanticipated obligations may be
imposed upon a party without notice or an opportunity to be heard." 416 U.S. at
720, 94 S.Ct. at 2021. This inquiry focuses on "whether the new statutory

obligation, if known, would have caused the defendant to alter its conduct."
Campbell, 809 F.2d at 576. We agree, only in part, with the Ninth Circuit's
analysis in Campbell that while "imposition of the T-bill rate for the period
prior to the enactment or effective dates might impose unanticipated obligations
on litigants, we cannot say the same for interest accruing after the delayed
effective date." Id. As in Campbell, the fact that this case involves a judgment
that was appealed long after the enactment date supports the position that the
imposition of the T-bill rate after the effective date does not constitute an
unforeseeable obligation. However, we go even further and hold that
imposition of the T-bill rate would not constitute manifest injustice even for the
ten month period between the December 2, 1981 judgment from which interest
in this case accrues and the October 1, 1982 effective date of the amendments.
We believe that the Court of Appeals for the Eighth Circuit in Dalton correctly
applied The Schooner Peggy and the Bradley presumption to hold that the
amended version of section 1961 applies as current law, regardless of whether
interest begins to accrue under the statute prior to October 1, 1982.
46

In view of the nature and identity of the parties, the nature of their rights, and
the nature of the impact of the change in the law on their rights, we conclude
that application of the T-bill rate to the entire period does not result in manifest
injustice. Thus, we conclude that the district court erred in applying
Pennsylvania's six percent simple interest rate in this case.

C.
The July 3, 1986 Payment
47

III.

On July 3, 1986, Kaiser paid Bonjorno the sum of $9,567,939.00. The United
States rule provides that payments on judgments are applied first to accrued
interest and then to principal, unless there is a " 'clearly expressed intention [by
the parties] to handle allocation some other way.' " Devex Corp. v. General
Motors Corp., 749 F.2d 1020, 1025 (3d Cir.1984) (quoting Nat G. Harrison
Overseas Corp. v. American Barge Sun Coaster, 475 F.2d 504, 507 (5th
Cir.1973)). The court below held an evidentiary hearing to determine the intent
of the parties and found that the parties intended the payment as full payment of
the outstanding principal. App. at 792. The court then found that the payment
"would satisfy the principal judgment and stop the accrual of post-judgment
interest." App. at 793. We affirm the finding of the district court that the
payment of $9,567,939.00, the exact amount of the jury award without accrued
interest, was intended by all parties to be allocated to the principal sum due.

CONCLUSION
48

In summary, we conclude that interest commenced accruing on the

$9,567,939.00 jury verdict entered on December 2, 1981. For the reasons set
forth above, the verdict draws interest pursuant to the amended version of 28
U.S.C. Sec. 1961 from December 2, 1981.

49

Because we find that the higher T-bill rate must be applied from December 2,
1981, the July 3 payment did not stop the accrual of interest.19 On each
December 2, the anniversary of the jury verdict, a new principal is established.
The July 3 payment must be subtracted from the new principal which exists just
prior to the July 3, 1986 payment. Interest then accrues in the same fashion on
this new principal until the judgment is paid.

50

STAPLETON, Circuit Judge, concurring and dissenting.

51

I concur in the court's holding that the plaintiff should receive post-judgment
interest on $9,567,939 from December 2, 1981. If the district court had not
erred by vacating the judgment entered on the jury's verdict of December 2,
1981, the plaintiffs would have received post-judgment interest commencing on
that date. Poleto v. Consolidated Rail Corp., 826 F.2d 1270 (3d Cir.1987).
Under the teachings of Institutionalized Juveniles v. Sec. of Public Welfare,
758 F.2d 897 (3d Cir.1985), the fact that the plaintiffs were required to litigate
an appeal to fully vindicate their rights should not result in post-judgment
interest commencing any later than that date.

52

I reject the plaintiffs' suggestion that interest should run from August 16, 1979
because I know of no logic or authority which supports the proposition that
post-judgment interest should commence as of the date of a verdict as to
liability only. Finally, I conclude that the date of the 1979 damage verdict is
inappropriate as well. Where, as here, a judgment and damage verdict are
vacated because the plaintiffs failed to supply evidence to support the jury's
damage award and that vacation is not overturned, I perceive no justification for
awarding post-judgment interest back to the date of the vacated verdict or
judgment.

53

I am constrained to dissent, however, from the court's holding that the 1982
amendment to 28 U.S.C. Sec. 1961 is applicable to this case. Like the Courts of
Appeals for the Second, Fourth, Fifth, and Seventh Circuits,1 I would hold that
this amendment does not apply to any judgment entered prior to October 1,
1982, the effective date of the amendment, without regard to whether there was

an appeal from the judgment pending on that date.2

54

I would uphold the decision of the district court with respect to the applicable
rate of post-judgment interest for essentially the reasons articulated by Judge
Newman in Litton Systems v. American Tel. & Tel. Co., 746 F.2d 168 (2d
Cir.1984), and by Judge Johnson in Brooks v. United States, 757 F.2d 734 (5th
Cir.1985). I will add only two thoughts, both of which go to the issue of
whether Congress would wish the presumption of Bradley v. Board of
Education, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974) applied in
connection with the amendment to Sec. 1961.

55

Unlike most other legislatively established rules of law, the rule established by
Sec. 1961 after its amendment, as well as the rule established by it before, are
focused on a particular point in time--the date of the entry of judgment. On that
date, under both rules, the rate of post-judgment interest is fixed once and for
all time for the particular case, and the rate fixed takes effect immediately. At
any time thereafter, the judgment may be executed upon by the plaintiff in the
absence of a supersedeas bond or may be voluntarily satisfied by the defendant
whether or not there is to be an appeal. Given this focus on the date of the entry
of judgment, I think it highly unlikely that Congress intended the post-judgment
interest rate in a particular case to be retroactively altered in the event an appeal
lasted beyond the effective date of the amendment.

56

The Federal Courts Improvement Act containing the amendment to Sec. 1961
was enacted on April 2, 1982. In the Act, Congress expressly provided that "
[u]nless otherwise specified, the provisions of [the] Act shall take effect on
October 1, 1982." Pub.L. No. 97-164, Sec. 402. Since Congress did not
"otherwise specify" with respect to the amendment to Sec. 1961, this effective
date provision postponed the change in the manner of establishing a postjudgment interest rate for a period of six months. Thus, Congress chose to
postpone for a very substantial period the relief it was affording to plaintiffs
whom it perceived as being substantially undercompensated by prevailing state
interest rates. This decision suggests to me that Congress had a substantial
countervailing concern about the reliance interests of litigants who had made or
would make decisions concerning appeals and/or the payment of judgments
based on the old rates. Given that this concern is equally implicated whether or
not an appeal winds up continuing beyond the effective date of the Act, I am
unwilling to attribute to Congress an intent to discriminate between the holders
of simultaneously entered judgments based on whether their appeals were still
pending on the effective date of the Act.

57

For the foregoing reasons, I would affirm the judgment of the district court.

Normally, there are two components of the total interest amount. The first
component is the interest from the date of the loss to the date of the judgment.
This element is generally awarded either as prejudgment interest or as a portion
of the continuing damages up to the time of the judgment. The second
component is the interest from the date of the judgment to the date that the
damages are paid. This amount is awarded as post-judgment interest under 28
U.S.C. Sec. 1961 (1982). See, e.g., Handgards, Inc. v. Ethicon, Inc., 743 F.2d
1282, 1300 (9th Cir.1984), cert. denied, 469 U.S. 1190, 105 S.Ct. 963, 83
L.Ed.2d 968 (1985). The plaintiffs do not seek pre-judgment interest in this
appeal

Joseph A. Bonjorno, George M. Kerr, Jr. and Barbara K. Clisby were

substituted as plaintiffs when Columbia went out of business

The plaintiffs were the sole stockholders of now defunct Columbia which was
at one time a fabricator of aluminum drainage pipe in Vineland, New Jersey.
The plaintiffs alleged that Kaiser monopolized the market for aluminum
drainage pipe in the Mid-Atlantic region of the United States in violation of the
Sherman Act, 15 U.S.C. Secs. 1 & 2 (1982). A statement of plaintiff's claims in
the underlying litigation may be found in Bonjorno v. Kaiser Aluminum &
Chem. Corp., 752 F.2d 802 (3d Cir.1984)

Fed.R.App.P. 37 provides in pertinent part:

If a judgment is modified or reversed with a direction that a judgment for
money be entered in the district court, the mandate shall contain instructions
with respect to allowance of interest.

The "T-bill" rate is "equal to the coupon issue yield equivalent (as determined
by the Secretary of the Treasury) of the average accepted auction price for the
last auction of fifty-two week United States Treasury bills settled immediately
prior to the date of the judgment." 28 U.S.C. Sec. 1961 (1982)

The cases allowing interest to run from a date other than the final judgment
date involve situations in which the court either reinstates a verdict or modifies
the amount of the judgment. See, e.g., Institutionalized Juveniles v. Secretary of
Pub. Welfare, 758 F.2d 897 (3d Cir.1985) (modifying a judgment); Handgards,
Inc. v. Ethicon, Inc., 743 F.2d 1282, 1300 (9th Cir.1984) (holding that plaintiff
is entitled only to post-judgment interest from the date of the first judgment to
the date of the second judgment because the claim was not liquidated until the
first judgment)

See Chattem, Inc. v. Bailey, --- U.S. ----, 108 S.Ct. 2831, 100 L.Ed.2d 931
(1988) (White, J.) (dissenting from denial of certiorari). The Courts of Appeals
for the Seventh and Tenth Circuits use the later date for purposes of calculating
post-judgment interest under this statute. See Harris v. Chicago Great W. Ry
Co., 197 F.2d 829, 836 (7th Cir.1952); Ashland Oil, Inc. v. Phillips Petroleum
Co., 607 F.2d 335, 366 (10th Cir.1979), cert. denied, 446 U.S. 936, 100 S.Ct.
2153, 64 L.Ed.2d 788 (1980). By contrast, the Courts of Appeals for the First,
Second, Third, Fifth, Sixth, Eighth and Ninth Circuits have adopted a broader
reading of Sec. 1961 and begin the accrual of interest from the date of the
initial judgment. See United States v. Michael Schiavone & Sons, Inc., 450
F.2d 875, 876-77 (1st Cir.1971); Smith v. National Railroad Passenger Corp.,
856 F.2d 467 (2d Cir.1988); Poleto v. Consolidated Rail Corp., 826 F.2d 1270,
1280-81 (3d Cir.1987); Affiliated Capital Corp. v. City of Houston, 793 F.2d
706, 710 (5th Cir.1986); Bailey v. Chattem, 838 F.2d 149, 153 (6th Cir.1988),
cert. denied, --- U.S. ----, 108 S.Ct. 2831, 100 L.Ed.2d 931 (1988); Buck v.
Burton, 768 F.2d 285, 287 (8th Cir.1985); Turner v. Japan Lines, Ltd., 702 F.2d
752, 755-57 (9th Cir.1983). In Smith, the Court of Appeals for the Second
Circuit recently reversed the position it had earlier taken in Powers v. New
York Cent. R.R., 251 F.2d 813, 818 (2d Cir.1958)

Kaiser acknowledges in its brief that this Court of Appeals would most likely
rule that the earlier date applies; however, it presents the argument for purposes
of preserving it for possible appeal to the United States Supreme Court in light
of the conflict among circuit courts. Kaiser states that "Kaiser acknowledges,
however, that the combined effect of this Court's holding in Poleto v.
Consolidated Rail Corp., 826 F.2d 1270 (3d Cir.1987), and Institutionalized
Juveniles v. Sec. [of] Pub. Wel., 758 F.2d 897 (3d Cir.1985), may foreclose
this argument before this Court." Appellee's Brief at 41

See, e.g., Poleto, 826 F.2d at 1280 (stating that "[t]he purpose of postjudgment
interest is not diluted where, as here, the initial ascertainment of damages is left
standing but a delay occurs between the date of the ascertainment and the date
of the eventual entry of judgment."). In Poleto, the verdict and the entry of
judgment were separated by approximately three months. We concluded that "
[b]ecause all the substantive issues were decided by the jury upon the verdict ...
it is analogous to a final judgment for purposes of section 1961." Id

10

We have considered Bonjorno's argument that a "market rate" of interest should

apply; however, we find the argument to be without merit

11

The post-judgment interest rate in Pennsylvania is calculated at the legal rate

which is six percent. 42 Pa.Cons.Stat.Ann. Sec. 8101 (Purdon 1988)

12

The Courts of Appeals for the Second, Fourth, Fifth and Seventh Circuits agree
that amended Sec. 1961 should not to be construed to apply to judgments
entered before its effective date, even if on that date they were pending on
direct review. See Brooks v. United States, 757 F.2d 734, 741 (1985); Litton,
746 F.2d at 174; Merit Ins. Co. v. Leatherby Ins. Co., 728 F.2d 943, 944 (7th
Cir.1984), cert. denied, 469 U.S. 918, 105 S.Ct. 297, 83 L.Ed.2d 232 (1984);
United States v. Dollar Rent A Car Systems, Inc., 712 F.2d 938, 940 n. 5 (4th
Cir.1983)

13

Bradley does not characterize the issue as one of "retroactivity."

14

In Bradley, Justice Blackmun, writing for a unanimous Court, cautioned that

the issue was not whether the fee statute applied "retroactively" to fees for
services rendered prior to enactment, but rather whether a fee award was
justified by current law. He states:
The question, properly viewed, then, is not simply one relating to the propriety
of retroactive application of Sec. 718 to services rendered prior to its enactment,
but rather, one relating to the applicability of that section to a situation where
the propriety of a fee award was pending resolution on appeal when the statute
became law.
416 U.S. at 710, 94 S.Ct. at 2015.

15

The Court in Bradley did not explicitly hold that a change in the law must be
given effect to pending cases unless a clear indication existed to the contrary.
Nevertheless, although the Court stated that "neither our decision in Thorpe [v.
Housing Authority of Durham, 393 U.S. 268, 89 S.Ct. 518, 21 L.Ed.2d 474
(1969) ] nor our decision today purports to hold that courts must always thus
apply new laws to pending cases in the absence of clear legislative direction to
the contrary," id., it did apply the Bradley presumption of retroactivity in the
face of the "equivocal" legislative history of the statute at issue in the case, id.
416 U.S. at 716-17, 94 S.Ct. at 2018-19

16

We also acknowledge the dissent's objection to retroactive application which is

based on the hypothetical situation in which interest on judgments entered
simultaneously may accrue at different rates depending on whether the appeal
from those judgments endures beyond the effective date. However, the dissent
ignores the fact that such differing results may occur in any case in which the
Bradley presumption controls. Whether a change in the law must be applied to
cases pending on appeal under Bradley must always rest on the fortuitous
continuation of the appeal beyond the time the law to be applied underwent the
change at issue

17

See Note, The Postjudgment Interest Rate in Pennsylvania: Ignoring Reality for
Too Long, 23 Duq.L.Rev. 1083-84 (1985) (footnotes omitted) (stating that
Pennsylvania's rate "represents the lowest non-variable postjudgment interest
rate applied in the United States, both in the state and federal courts. At best,
this represents a legislative oversight by the Pennsylvania Legislature; at worst,
it is indicative of a ... failure to grasp the realities of the modern economic
world....")

18

The Second Circuit Court of Appeals stated in Litton that:

[w]hatever consideration is appropriate for antitrust plaintiffs as private
attorneys general bringing suits that serve the national interest, there is little
doubt that national interests are not affected by the outcome of this collateral
action to secure an increase in the rate of post-judgment interest.
Litton, 746 F.2d at 175.

19

According to a July 27, 1982 Memorandum on Post-Judgment Interest issued

by the Office of the United States Courts, interest is computed daily and
compounded annually. App. at 475

Litton Systems v. American Tel. & Tel. Co., 746 F.2d 168 (2d Cir.1984); U.S.
v. Dollar Rent A Car Systems, Inc., 712 F.2d 938, 940 n. 5 (4th Cir.1983);
Brooks v. United States, 757 F.2d 734 (5th Cir.1985); Merit Ins. Co. v.
Leatherby Ins. Co., 728 F.2d 943, 944 (7th Cir.) (per curiam), cert. denied 469
U.S. 918, 105 S.Ct. 297, 83 L.Ed.2d 232 (1984). In a July 27, 1982
memorandum to all Federal Judges, Magistrates, Court Executives, and Court
Clerks, the Administrative Office of the United States Courts also adopted the
position that the 1982 amendment to Sec. 1961 should not be applied
retroactively, stating:
It is our view that the new rate will apply only to judgments entered on or after
[the effective date]. The rate attaches as of the date of judgment and does not
change thereafter unless the judgment is vacated or otherwise set aside.

Institutionalized Juveniles v. Sec. of Public Welfare, 758 F.2d 897, 927 (3d
Cir.1985), is not in conflict with this conclusion. The court there held that the
new post-judgment interest rate should be applied to the original order allowing
the award of counsel fees which was entered on July 26, 1983, well after the
effective date of the amendment